Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506756
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Question
Chapter 7, Problem 9CQ
(a)
To determine
Identify the contribution to
(b)
To determine
Identify the contribution to GDP when Person J spend $200 on parts and pays $400 to repair the machine.
(c)
To determine
Identify the contribution to GDP when Person J spends $200 on parts and rebuild the engine.
(d)
To determine
Identify the contribution to GDP when Person J sells her automobile for $5,000 and buys from Person S for $10,000.
(e)
To determine
Identify the contribution to GDP when Person J sells automobile for $5,000 and buys new car for $20,000.
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Which of the following transactions should or should not be counted in GDP?
Answer Yes or No and briefly explain your answer. Answers without explanation will not be considered
in grading, even if they are correct.
a. You buy a pair of new cowboy boots on a trip to Texas
b. You buy a pair of vintage cowboy boots from your cousin in El Paso
c. A cat burglar sells $10,000 of stolen jewelry to a fence
d. Amazon issues $1 billion worth of new shares
e. GM purchases $100 million worth of tires from Firestone
f. A private company builds a new road in Memphis Y
g. Stay-at-home parents provide an estimated $500 million of child care services
Which of the following would be captured and included in the calculation of GDP?
A) The cost of hospital stays.
The rise in life expectancy over time.
(C) Child care provided by a licensed day care center.
Child care provided by a grandmother at home.
A used car sale to the Brown family.
A new car sale to the Brown family.
(G) The greater variety of cheese available in supermarkets.
The iron that goes into the steel that goes into a refrigerator bought by the Brown family.
What components of GDP (if any) would each of the following transactions affect? Explain.
Uncle Tom buys a new refrigerator from a domestic manufacturer.
Sidd buys a new house from a local builder.
The Aladin family buys an old Victorian house from the Disney family.
You pay a hairdresser for a haircut.
Ford sells a Mustang from its inventory to the Cernogratz family.
Ford manufactures a Focus and sells it to Avis, the car rental company.
California hires workers to repave Highway 101.
The federal government sends your grandfather a Social Security check.
Honda expands its factory in Larkana.
Chapter 7 Solutions
Macroeconomics: Private and Public Choice (MindTap Course List)
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Similar questions
- Which of the following are included in GDP calculations? a. Cleaning services performed by Molly Maid Corporation b. Lawn-mowing services performed by a neighborhood child c. Drugs sold illegally on a local street comer d. Prescription drugs manufactured in the United States and sold at a local pharmacy e. A rug woven by hand in Turkey f. Air pollution that diminishes the quality of the air you breathe g. Toxic-waste cleanup performed by a local company h. Car parts manufactured in the United States for a car assembled in Mexico i. A purchase of 1,000 shares of IBM stock j. Monthly Social Security payments received by a retireearrow_forwardSelect all the items which would be counted in US GDP 2015 from the list below: Select all the items which would be counted in US GDP 2015 from the list below: Group of answer choices Carla goes to Japan and purchases a kimono as a souvenir for $300 S.W. inc. sells 100 gallons of paint to Tusk Construction Inc., a contractor, who is painting an office building Bob buys a new Mercedes made in Alabama in 2015 Robert buys a new tablet made in the US in 2015 Ford sells F-150s from its plant in Detroit to Canada for $1mil. Harry cashes his social security check for $1,500.arrow_forwardWhich of the following transactions or activities would be counted in your country’s GDP? Explain your answers. A transportation company acquires a fleet of second-hand vehicles. The same transportation company acquires 1.000 gallons of gas from a foreign company deducted from the net export component of GDP. You buy 10 short-term government bonds. A mining company acquires new government licenses to drill in land the company already owns. You pay for a new haircut at your local hairdresser. Foreign residents buy a bundle of your country’s food specialties on an online retail site. Your parents spend a whole day cooking meals to be handed out to their poorer neighbors. The local government acquires furniture for newly built schools. Two telecommunications companies merge. A non-profit organization buys an apartment to lodge their headquarters.arrow_forward
- Identify as included or not included in gdp You buy a classic 1965 Ford Mustang that is in perfect condition. The government buys 100 new F-22 Raptors fighter jet GMC Car Company buys 100 tons of steel use in car frames. You buy 100 shares of Apple stock as a retirement fund investment. Amazon builds a new warehouse in Austin BMW a German company produces new cars in South Carolina Jim makes dinner at home Betty takes her family to dinner at a restaurant Walter White sells $1 million dollars of illegal drugs : Included in GDP :: Not Included in GDParrow_forwardI. The sale of a house from an existing homeowner to an incoming homeowner in a subdivision is included in the computation of GDP II. The purchase of stocks and bonds is not included in the computation of GDP III. Broker's commissions for the sale of financial instruments is included in the computation of GDP IV. The lawyer's fees to facilitate the transfer of title of an existing house from one homeowner to another is included in the computation of GDP O Only Statement Il is false O Only Statement I is false All Statements are false Only Statements III and IV are true O All Statements are truearrow_forward1) How do the following events influence Turkish GDP? Mothers living in Turkey take care of their pre-school child in their own home. You buy a new car from a dealer for 80,000 TL. You sell your father’s used car to a dealer for 70,000 TL. You sell your old car to a dealer for 60,000 TL. The dealer repaints it and sells it to a customer for 80,000 TL A Japanese company builds a factory in Düzce. (If this affects GDP, is it the Japanese or the Turkish GDP?) A German company buys stock in a Turkish company. An earthquake destroys many structures in Gebze industrial zone. The structures are not rebuilt this year. An earthquake destroys much of Gölcük and within a short time the town is rebuilt as it was before.arrow_forward
- Which of the following transactions would be included in the official calculation of GDP under the expenditure method? You make cookies to give as a gift to your parents. You buy a new iPod for listening to music. You illegally download music off the Internet to put on your new iPod. O Bridgestone sells $2 million worth of tyres to General Motors Holden. A student buys a used textbook at the bookstore.arrow_forwardFor each of the following scenarios, tell whether GDP would change and how each of the components of GDP would be affected. Honda expands its factory in Marysville, Ohio. You buy a bucket of fried chicken. Cousin Fred buys a newly built house. A family buys a new washing machine made this year in this country. Chrysler sells a Jeep from its inventory to an American household. California repaves Highway 101. An Italian household buys a bottle of California wine. In the Land of Milk and Honey, they produce two goods: Milk and Honey. In 2014, milk cost $2 a gallon and they produced 20 gallons. Honey cost $1 a pint and they produced 40 pints. In 2015, milk cost $2 a gallon and they produced 24 gallons. Honey cost $1 a pint and they produced 48 pints. In 2016, milk cost $2.50 a gallon and they produced 24 gallons. Honey cost $1.25 a pint and they produced 48 pints. The base year is 2015. During which time period did standard of living improve more? From 2014 to 2015 or From 2015 to…arrow_forwardHow would each of the following transactions affect the GDP of the United States (Increase, decrease, or does not change)? The U.S. government pays $1 billion in salaries for government workers. GDP will... The U.S. government pays $1 billion to Social Security recipients. GDP will... The U.S. government pays a U.S. firm $1 billion for newly produced airplane parts. GDP will... The U.S. government pays $1 billion in interest to holders of U.S. government bonds. GDP will...arrow_forward
- Tom is an organic gardener. For several years, he produced only for his own consumption. Last year, he sold his vegetables on Amazon directly to consumers. This year, he sold all of his vegetables to a company producing organic vegetable soup. When is the value of Tom’s vegetables included in GDP? Select one: a. None of his production is included in GDP, since it is considered home production. b. Only when he sells his vegetable on Amazon (BLS is able to see this transaction) c. When he sells his vegetables at the farmer's market and when he sells the vegetables to the organic soup company. d. Only when he sells his vegetables to the organic soup company.arrow_forwardIndicate what components of GDP (if any) each of the following transactions would affect. Check all that apply. Transaction Honda expands its factory in Ohio. You purchase a box of Belgian chocolate. You pay a hairdresser for a haircut. Uncle John receives a check from the federal government for unemployment insurance benefits. Your parents buy a new house from a local builder. Ford sells a Mustang from its inventory to the Martinez family. Uncle Henry buys a new refrigerator from a domestic manufacturer. New York hires workers to plow snow after a snowstorm. Consumption Investment D 0 0 D D 00 0 O 0 0 m O 0 e Government Purchases O W O 0000 Net Exports DOO 0 00000arrow_forwardIndicate what components of GDP (if any) each of the following transactions would affect. Check all that apply. Transaction Consumption Investment Government Purchases Net Exports Your parents buy a bottle of French wine. Uncle John receives a check from the federal government for unemployment insurance benefits. Ford manufactures a Focus and sells it to Avis, the car rental company. Your parents pay an accountant to file their tax returns. Ford sells a Mustang from its inventory to the Martinez family. Aunt Jane buys a new house from a local builder. Aunt Polly buys a new air conditioner from a domestic manufacturer. Texas hires public middle school teachers.arrow_forward
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